PAY
EQUITY
The Proxy Comparison Method
What is the Proxy Comparison Method?
Proxy is a method of comparison that allows you to achieve pay equity by borrowing job and salary information from another public sector organization to complete pay equity comparisons. Only organizations that are part of the public sector, as defined by the Pay Equity Act,* who had employees on July 1, 1993 may use the proxy method.
How do I get there?
In order to use the proxy method, your organization must have attempted the job-to-job method of comparison. This method of comparison matches jobs that are predominantly held by women, known as female job classes, directly to those predominantly held by men, known as male job classes. Some female job classes may not find a male comparator. Then your organization must use the proportional value method for these unmatched female job classes.
Proportional value looks at the relationship between the value or points of male job classes and the pay they receive and requires that the same relationship be applied to female job classes.
If you have applied both the job-to-job and proportional value comparison methods in your establishment and still cannot achieve pay equity for all of your female job classes, you must notify the Pay Equity Commission by filing a Notice of Inability to Achieve Pay Equity form. You may request this form by calling our Hotline at 1-800-387-8813 or 416-314-1896.
After verifying that you are a broader public sector employer and that you cannot achieve pay equity using either of the first two required methods, a Review Officer will issue an order requiring you to do proxy comparisons. Only employers who have received an order can proceed with proxy comparisons. These employers are then called "seeking employers" by the Act. The order allows you to request information from a public sector organization that has prepared a pay equity plan. The Act refers to this organization as a "proxy employer."
How do I prepare a plan?
Once you have received an order for proxy, there are seven steps for you to follow. Call the Pay Equity Commission to receive the publication A Guide to the Proxy Comparison Method which provides further detailed information on each of these steps.
In workplaces where there are employees represented by a bargaining agent, the responsibility falls on both the employer and bargaining agent to establish and maintain pay equity for the bargaining unit. Each step in the proxy comparison process must be negotiated.
For non-union employees, the employer is responsible for preparing a proxy pay equity plan. Employees can then comment on or object to the plan once it is posted in the workplace.
Step 1. Identify your key female job classes
For the proxy employer to provide appropriate information, you must send them descriptions of your key female job classes. Key female job classes are those that perform duties that are essential to delivering your organization's services. Once you have identified key female job classes, develop descriptions of the duties and responsibilities of each job class to send to the proxy employer.
Step 2. Select your proxy comparator organization
For information about how to select the appropriate type of proxy comparator organization, refer to Regulation 396/95 of the Pay Equity Act or contact the Pay Equity Commission and request a copy of a Guide to the Proxy Comparison Method.
When choosing the proxy employer, you look first within your geographic division as described in the Territorial Division Act.* If you are unable to find an appropriate proxy organization, search for the next closest suitable organization.
The proxy employer is required by law to provide the job and salary information you need to do proxy comparisons, within sixty days of your request. The request for information must be in writing and signed by officials of your organization and the bargaining agent, if there is one representing your employees.
Step 3. Evaluated female job classes
For each proxy female job class, you should receive a description of its duties and responsibilities and its pay equity job rate from the proxy employer.
Using a comparison system that is free of gender bias, evaluate the job classes in your organization and those of the proxy organization on the basis of skill, effort, responsibility and working conditions. The Commission can provide a comparison system titled A Guide to the Broader Public Sector: A Job Evaluation System. To obtain a free copy call 1-800-387-8813 or in Toronto 416-314-1896.
Step 4. Developing a job rate line for proxy job classes
After determining the job value and job rate for each female job class in both organizations, you can compare the job values and job rates for your female job classes with those in the proxy organization by using a job rate line. For a detailed explanation on how to calculate a job rate line, refer to step 4 of A Guide to the Proxy Comparison Method.
Step 5. Determine pay equity adjustments for your female job classes
Use the job rate line to calculate the adjustments needed to reach pay equity for your female job classes (pay equity adjustments). See step 5 (pp. 24-26) in A Guide to the Proxy Comparison Method, for help in calculating adjustments.
Step 6. Post your proxy pay equity plan
Prepare and post a pay equity plan showing how you will achieve pay equity using the proxy comparison method. If the plan covers job classes in a bargaining unit, the plan must be negotiated between you and the bargaining agent. The approval process differs for bargaining unit and non-bargaining unit plans.
For non-bargaining unit plans
- The employer must post the plan to allow employees an opportunity to view it.
- Employees have 90 days from the date of posting to review the pay equity plan and make comments on the plan to the employer.
- At the end of the 90-day period, the employer has seven days to post an amended plan or a notice stating there are no changes.
- Employees then have 30 days to notify the Pay Equity Commission if they object to the Plan.
For a bargaining agent
The plan is deemed approved when you and the bargaining agent have agreed on and have signed the plan and posted it in the workplace. The plan must meet the requirements of the Act.
Step 7. Begin your pay equity adjustments
You are required to spend, each year, at least one per cent of your previous year's total payroll on pay equity adjustments, or the amount required to achieve pay equity if it is less than one percent. These adjustments were to have begun on January 1, 1994. If payments began late, they must be made retroactive to this date.
When you distribute the one percent of payroll, the female job class or classes with the lowest job rate in the plan must receive a greater adjustment than the other job classes in the same plan until pay equity is achieved (or until this job class is paid as much as the next lowest female job class).
Wasn't the Proxy Method of Comparison repealed?
Yes. The government passed legislation in 1996 (Schedule J of the Savings and Restructuring Act) to phase out the proxy method so that it was fully repealed from the Pay Equity Act by January 1, 1997.
However, a legal challenge was brought against this legislation, and a court decided that Schedule J violated the Charter of Rights and Freedoms by repealing the proxy method. The court declared that Schedule J had no force and effect - this means that the proxy method is reinstated in the Pay Equity Act, as though it had never been repealed.
What impact does the repeal and reinstatement of proxy have on the proxy adjustments I am required to make?
The requirement to achieve pay equity using proxy comparisons is now reinstated in the Act in its original form. When Schedule J of the Savings and Restructuring Act, 1996 phased out proxy, however, it changed and reduced employers' obligations for the period from 1994 to 1996. Since the proxy method is now reinstated, you must examine your proxy pay equity plans to determine whether any additional retroactive adjustments are required for the period from 1994 to 1996 in order to meet your original obligations.
How do I get more help or information?
We are here to help. The Pay Equity Commission provides the publication A Guide to the Proxy Comparison Method which will guide you through the step by step process of preparing a proxy pay equity plan. We can answer your questions by e-mail at pecinfo.pecinfo@ontario.ca or by phone at (416) 314-1896, or toll-free at 1-800-387-8813. You can also register for a free seminar.
All communications are confidential.
* To obtain copies of the Pay Equity Act or the Territorial Divisions Act, contact Publications Ontario at 1-800-668-9938 or in Toronto at 416-326-5300.
The Pay Equity Commission
This fact sheet is for information only, and is not intended to restrict Review Officers or the Pay Equity Hearings Tribunal in their determination of matters. Refer to the Pay Equity Act for exact interpretation.
ISBN: 0-7794-9796-1
